Starting a DPC Practice
1) Begin by doing as much home work as possible; start by reviewing our resources page. There are more than seventy CME-style open access recordings linked here. Academic publications and other policy papers are directly linked as well.
2) Compare different options for your geographic location. DPC practices are known to be successful in urban, suburban, and rural areas, but the rural areas can present more challenges. Dr. Eskew has published an article entitled "Which State Best Suits Your Practice: An Analysis and Reference Guide" which might serve as a helpful resource. If you plan to dispense medications to your patients directly in your office (another source of costs savings and convenience for patients), pay particular attention to the eleven states where this activity is prohibited or severely restricted. You might start with this overview, but details are covered on our state's pages as well. If you have questions always ask your state medical board prior to asking your board of pharmacy. Look over our DPC Mapper to determine whether you anticipate any nearby competition (or more likely assistance) from other DPC practices. Consider whether your state has DPC legislation or any anticipated regulatory barriers (often found in the language of the state insurance code). If you are remaining local and worry that a Non-compete Agreement might get in the way, use these resources from the AHLA, Fenwick & West, and Beckreedriden to determine whether there is any validity to your agreement.
3) Decide whether you want to run a "Pure" or "Hybrid" practice, and whether you plan to "Opt Out" of Medicare. See my article discussing this decision point. If you would like to Opt Out, the best comprehensive summary of steps necessary can be found on the Association of American Physicians & Surgeon's "How to Opt Out of Medicare" webpage. This process is not too difficult there are steps to confirm the opt out was a success.
4) Marketing: Start by deciding how (whether) you will market yourself to three groups:
Third Party Organizations
Individual patients - word of mouth is still the gold standard. Most paid advertising (such as newspaper advertisements) are ineffective, but many DPC physicians have had success with radio advertisements. If your model is easy to understand and provides immediate value, people will tell their friends about you. Placing a short video like this one from Brian Forrest on your website would likely be helpful.
Employers - These can be small (less than 50), midsize (50-150), or large (> 150). Their needs and tax implications will vary with their size. With those that have less than 50 employees the discussion will be fairly simple. With larger employers you will need to either understand or bring someone that can discuss concepts of stop loss or level funded health plans (these mechanisms are used to ensure you save the employer money rather than just save the insurance company money).
Third party organizations (for payment purposes only - remember that you should always have an individual contract between the practice and each patient). These might include:
Insurance Carriers (such as Allied National), Brokers, Third Party Administrators
Medicare Advantage Pilots (Iora Health has started this as well)
5) Consider whether you want to be totally independent, join a network, or be employed. Many larger DPC practices routinely employ physicians. Consider contacting any of the practices listed in the DPC Mapper when looking for employment. Investigate all your options - it may be in your best interest to "moonlight" part-time in a DPC onsite clinic and then have your own DPC practice as well. Here are a few of the more established DPC Groups or Networks. You will find a mix of consulting, networking, and employment opportunities from among them.
Access Healthcare Direct (Brian Forrest, MD - consulting, GPO pricing, lab discounts)
AtlasMD (Josh Umbehr, MD - shares practice advice with integrated 3-part software solution)
Iora Health (Rushika Fernandopulle, MD)
Nextera Healthcare (Clint Flanagan, MD - hybrid network based in Colorado)
Paladina Health (National on-site DPC clinics - Owned by Davita
PeakMed Primary Care (Mark Tomasulo, DO - onsite DPC based out of Colorado)
Primacare Direct (Minnesota hybrid network)
Proactive MD (Phil Eskew, DO, JD, MBA - onsite DPC based out of South Carolina)
6) Draft an estimated budget. Consider ways to minimize the amount of start up capital needed - purchase used equipment (hospital surplus facilities can be helpful). Decide whether to buy or lease your office space - or if you even need office space! Some DPC micropractice designs avoid this expense as well.
7) Draft your DPC patient-physician contract to reflect your practice preferences while adhering to state and federal law (We do have national DPC patient agreements available for fellow physicians - just email a request to Dr. Eskew at phil@DPCfrontier.com). See my article that describes the common legal hurdles faced by DPC practices, and lists ten steps to mitigate your business of insurance "risk." Review your state's insurance code to assure yourself that your contract does not violate state insurance law or cause you to be labeled a health maintenance organization. If you have elected to work with employers, structure your contract in a manner that avoids any ERISA concerns. Compile all appropriate HIPAA forms, Medicare Opted-Out Agreements, and any needed registrations. Consider OSHA and CLIA rules as well. If you are running a "pure" DPC practice and have opted out of Medicare you may now be relatively less concerned about the False Claims Act and Stark Laws. I have summarized many of these items on the Federal Regulations page. Even more examples of forms are listed here.
8) We do recommend that you consult an attorney to draft or at least review the items in #7. Make sure that your attorney is familiar with direct primary care (a rare find these days since DPC is only beginning to experience exponential growth). Your legal costs will likely be lower if you make a first run at drafting the items on your own and then run your ideas by a contracts attorney. Dr. Eskew is not currently taking on individual legal clients. He may be reached at PHIL@DPCfrontier.com and he is happy to offer generalized self help advice for most quick questions at no cost. If you cannot find an answer to a question, please post your inquiry in our discussion forums.
9) Pursue price transparency. For any service within your practice (labs, medications, pathology, basic procedures) determine your costs and whether you plan to pass these through to the patient in an itemized fashion. These are relatively easy determinations. It can be tougher to establish relationships with surgery centers, radiology groups, specialists, and hospitals in the community. It can be hard to know whether they are quoting you fair prices. Fortunately we have Keith Smith, MD and Jay Kempton (a third party administrator) to thank for their transparent pricing that can serve as a reference for DPC physicians across the US.
Jay Kempton's transparent price list (all kinds of ancillary services)
Atlas MD pricing examples for labs and medications
10) Start your own practice website. (Many great examples can be found by reviewing the websites linked in our DPC mapper.) Market your practice to individual patients and their employers. Speak with specialists physicians in the community to establish a transparent cash price referral system for their services. You may need to educate these specialists that even though they may continue to participate in Medicare, this no longer bars them from offering cash paying patients prices below the Medicare reimbursement amount. (This was changed with the HITECH Act in 2009 - 42 USC 1320a-7(b)(6)(A)). Pages 3-5 of this Texas Medical Association document and this Health Lawyers Overview both provide helpful commentary). Consensus among the DPC community is that paid advertising tends to be low yield, but invited newspaper articles, radio interviews, and word of mouth are excellent ways to grow the practice. You may find that self insurance brokers and third party administrators are more than happy to steer patients to your practice because DPC works so well with these price sensitive plans. Review other checklists - this is only the first of many you should consider. Next you should head over to Bagel’s checklist.